Alternative Payment Models (APMS)

Alternative payment models (APMs) continue to grow as health system reform continues under the Medicare Access and CHIP Reauthorization Act (MACRA) as well as in the private sector. An APM, as defined by the Centers for Medicare & Medicaid Services, is a payment approach “that gives added incentive payments to provide high-quality and cost-efficient care” and can apply to a specific clinical condition, a care episode, or a population. These models include accountable care organizations (ACOs), bundled payments, and other APMs.

Understand the terminology with the CAP’s Value-Based Care Glossary, which defines some frequently used terms regarding federal initiatives and other key programs and concepts related to health care delivery system reform.

With the accelerated implementation of APMs under MACRA, coupled with expanded activity in the private sector, it is imperative to build awareness and prepare for implementation of new payment models. To ensure pathologists can participate and succeed in APMs, the CAP developed tools and information to prepare pathologists for new value-based programs under private and public payers. Access a set of value-based business toolkits, business management tools for pathology practices that will help you better understand your practice and its market and adapt to the changing health care industry.

Additionally, the CAP is focused on favorably influencing federal and state policies on these payment models for pathologists. Recently, the CAP submitted comments in response to the 2019 physician fee schedule proposed rule supporting changes that provide opportunities for appropriately-developed physician focused payment models, especially those within Medicare. The CAP also stressed in response to a Stark law request for information that more innovative health care payment and delivery models must be developed in an open and transparent fashion with the input of those specialties impacted by the models. Finally, the CAP also advocated in response to a proposed rule that seeks to overhaul the Medicare Shared Savings Program.

APMs and QPP

The Quality Payment Program (QPP), which implements the MACRA law, includes two tracks: the Merit-based Incentive Payment System (MIPS) track and the Advanced APM track. The Advanced APM track of the QPP offers a 5% incentive for achieving threshold levels of payments or patients through Advanced APMs. Advanced APMs are a subset of APMs that must meet the following three statutory requirements: (1) requires CEHRT use, (2) payment based on MIPS-comparable quality measures, and (3) requires participants to bear a more than nominal amount of financial risk.

Potential Financial Rewards

Additional Resources

Ensuring Pathologists' Role in Coordinated Care and APMs

The CAP and its Council on Government and Professional Affairs developed and drove legislation requiring ACOs to establish Clinical Laboratory Advisory Boards led by pathologists. The boards rely on the pathologist medical director to help the ACO ensure appropriate testing. They help identify and eliminate unnecessary pathology and laboratory testing. The boards also ensure that patients enrolled in the ACO receive all medically necessary tests. CLABs have demonstrated compelling medical value, implemented at nationally esteemed health care centers, and have served as a model for federal policymakers.